Allison Company Purchased a Machine for $1,200,000 at the Beginning

question 47

Essay

Allison Company purchased a machine for $1,200,000 at the beginning of 2013. Allison was using the double-declining-balance (200%) method to depreciate the asset and its useful life was estimated to be 5 years with a residual value of $200,000. At the end of 2014, Allison Co. estimates the future cash flows from the asset to be equal to $500,000 and the fair value to be $450,000.
Required:
What is the amount of the impairment loss?

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Definitions:

Pulmonary Vein

A blood vessel that carries oxygenated blood from the lungs to the left atrium of the heart.

Peripheral Vasodilatation

The expansion of blood vessels in the outer parts of the body, which can increase blood flow and decrease blood pressure.